Japanese shares fall on inflation fears; Nikkei sheds 159

The benchmark Nikkei 225 index dropped 159.22 points, or 1.1 percent, to 13,943.26.

Market players were jittery as oil prices jumped to a record near $124 a barrel, with investors seeming to ignore a report showing an increase in U.S. crude and gasoline supplies.

Traders said sentiment was also sluggish following heavy losses on Wall Street Wednesday.

Among losers, financial giant Mitsubishi UFJ Financial Group dropped 3.7 percent to 1,117 yen and Mizuho Financial Group fell 5.2 percent to 525,000 yen.

Shares in Japan's top automaker Toyota Motor Corp. declined 1.8 percent to 5,480 yen. Just as trading wound up, the company announced Thursday its profit for the fiscal fourth quarter dropped 28 percent from the previous year on the strong yen and lagging North American sales.

The Topix index of all the Tokyo Stock Exchange First Section fell 20.33 points, or 1.5 percent, to 1,372.95.

In currency trading, the dollar was quoted at 104.06 midafternoon in Tokyo, down from 104.70 in New York late Wednesday. The euro stood at $1.5342, up from $1.5394 late Wednesday in New York.